"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of the voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." - Ludwig von Mises

Monday, May 2, 2011

Not being independent is costing Scots jobs and prosperity

A piece I did for during my tenure as Chief Editor of Newsnet Scotland. I will soon resume publishing under the title Scottish Times.

by Alex Porter

As the party leaders clashed last night during the latest TV debate, Iain Gray claimed Alex Salmond’s dream of an independent Scotland would cost every Scot £2600. With the election now reaching fever pitch and Labour well behind in the polls and facing the loss of some high profile MSPs, Mr Gray resorted to spreading fear and panic insisting that Scotland would be left with a £13.75 billion black hole in its finances if it became independent.

Before the 2007 election Labour warned that every Scot would face a £5000 tax bomb were the SNP to be elected and many were turned off voting for the party. The reality of the SNP government was that Scots had their Council Tax frozen which actually reduced stress on family budgets.

The most recently available official figures show that Scotland's national accounts run a surplus. Scotland's financial position in the financial year 2008-2009 was a budget surplus of £1.3 billion (GERS) while the rest of the UK has been running the highest deficits in its history.

The question the Scots electorate might be then be forgiven for asking is why their nation should be shackled to the UK economy and paying the price for massive deficits it doesn't contribute to. With UK government debt heading for the £1 trillion mark and with no sign of Westminster tax-take increasing in the drowning UK economy, Scots can look forward to years, if not decades, of increasing austerity cuts if we remain within the confines set for us by Westminster rule.

London-driven public sector cuts have been foisted upon Scots to pay for the failure of economic policies largely under Gordon Brown's Labour government and then continued by the current coalition. The result of this chronic economic mismanagement is the UK's financial, economic and currency crises which Scots have no option but to watch their cities, communities and families being dragged into.

Despite this corrosive economic environment at UK level, Scotland's national accounts have heroically remained in surplus and employment trends have bucked the depressing UK reality. This is testimony to the sound management of the SNP, and especially Finance Minister John Swinney, who has created enormous efficiency savings in the way government is run, particularly in the area of public sector procurement. It is regrettable that Scots cannot reap the rewards of these savings and instead continue to face a reduction in their parliament's block grant from London.

The harsh truth is that with the relative value of the pound collapsing and UK debt continuing to rise to unsustainable levels, Scots must consider their options and decide what powers their parliament needs most to protect their families, jobs and businesses.

North Sea oil is currently underwriting UK government borrowing. Without it the UK would be insolvent. With around 8% of the UK population, estimates put Scotland's contribution - through North Sea oil revenues from corporation tax alone - at 20% of the UK total. That figure disregards taxation raised at the pump.

In an independent Scotland that money would be reinvested in jobs and services. With the second-largest pension fund in the world, Norway, the richest country in the world according to the Legatum Property Index 2010, shows that rather than face a future of austerity Scots could, and perhaps should, be building a prosperous future for their children and grandchildren.

In poll after poll Scots have shown that they want their parliament to have more economic powers. In order to thwart that expressed desire the Unionist parties have designed, what they shamefully call, the Scotland Bill in order to give the impression that more powers are about to be returned to Scotland, but upon closer scrutiny we can discern that more powers will be re-reserved to Westminster.

Another cruel piece of rhetoric being disseminated by the Scotland's too wee, too poor and too stupid brigade is that an independence referendum would distract government from improving the economy. Firstly, it seems that the more attention the last Labour government and the current coalition government pays the economy the worse it seems to get. That aside, Scots are more than capable of having a national debate on independence while still going to work. If we can watch EastEnders and work, if we can read newspapers and still run a family budget and if we can follow the football while making sure the BBC licence is still paid then the Scottish government can bring forward the independence referendum that Scots want, while still managing to get on with improving the economy - something only the SNP government in recent years has been capable of doing in any case.

The truth is, though, that independence is about improving Scotland's economy. Without independence Scots, through their parliament in Edinburgh, do not have the collective powers to really put jobs and prosperity back on the national agenda. It is a daily economic crime that Scots are misled about the economic lifeboat of independence whilst the truth of what lies ahead for the UK Titanic is kept from sight.

3 comments:

Shame Alex Salmond and the snp refuse yes absolutely refuse If elected.( a big If)To hold a Independence referendum until another 3 or 4 years have passed(must mean the facts you peddle are mere distortions of the truth)

why not asap well I'll tell ya because Alex (although the wide Nat eyed extremist such as yerself and the denizens of Numptynet delude themselves) Knows with a certainty the referendum would be overwhelmingly in favour of the Union as every poll for years and years years show.

The Norwegian model may have been a good prospect in the past but the figures may not look so good in the future. One report I saw was that Oslo now not only has a large recent migrant population but that most of the young people are of recent migrant origin. If this is correct it changes the picture.

If Scotland had returned a yes for independence it would have been a disaster considering there financial model was based on a specific cost per barrel of oil.Considering the panic due to the volatility of oil prices which will constantly be changing how would an independent Scotland cope financially. The plans put forward in the snp yes document would be in tatters, to enable them to fulfill these plans when the oil prices is less than those stated in their document would mean making changes to tax, or vat even having to introduce new taxes to fill the shortfall.

Remember we get revenue from the oil but we don't own it, if the oil companies decide to mothball rigs until prices go up there is nothing an independent Scotland could do.